Are sanctions against Russia effective? Russia and geopolitics and the world economy, lessons learned from the new era of economic warfare (1/4) | JBpress (JBpress)

Russia, Geopolitics and the Global Economy: Lessons from a New Era of Economic Warfare

(British Economist, August 27, 2022)

Russia’s currency, the ruble, also appears less affected by sanctions

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Six months ago, Russia invaded Ukraine. A war of attrition unfolds on the battlefield, a 1000 km long front of death and destruction.

Beyond that front, another battle rages on.

An economic conflict of a scale and ferocity not seen since the 1940s. The West is deploying a new arsenal of sanctions to paralyze Russia’s $1.8 trillion economy.

The effect of this import/export ban will be a key factor in determining the outcome of the war in Ukraine.

But it also reveals much regarding the ability of liberal democracies to project their power globally and influence China well into the late 2020s and beyond.

Worryingly, the sanctions war has so far not gone as smoothly as expected.

Unprecedented sanctions for Ukraine invasion

Since February, the West and its allies have been unleashing an unprecedented barrage of bans once morest tens of thousands of Russian companies and individuals.

The Russian government has frozen half of its $580 billion foreign exchange reserves, cutting most of Russia’s largest banks from the global payment system.

The United States is no longer buying Russian oil, and the European embargo will be fully enforced next February. Russian companies are barred from buying parts ranging from engines to semiconductors.

Oligarchs and government officials face immigration bans and asset freezes.

A task force set up by the U.S. Department of Justice called Kleptocapture has seized a superyacht that may have been carrying Faberge eggs.

These measures not only satisfy Western public opinion, but also have a strategic purpose.

In the short term, at least initially, it aims to trigger a liquidity and balance of payments crisis in Russia, make it harder to finance war in Ukraine, and force the Kremlin to change its mind.

In the long term, it aims to undermine Russia’s production capacity and technological sophistication.

If President Vladimir Putin were to aspire to invade other countries, they would leave their resources scarcely available.